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Integration of Mobility Management Into Fleet or Vice Versa?

I was recently asked to give a speech on the future of mobility by the NAFA Philadelphia Chapter. I welcome these opportunities because it forces me to focus beyond my near-term deadlines and conceptualize an emerging future by projecting forward current trend lines.

My assessment is that for the foreseeable future there will be no one-size-fits-all mobility model and the ongoing proliferation of competing mobility services will continue to be aggregated under the generic Mobility as a Service (MaaS) umbrella.

In addition, the disruption caused by the introduction of new mobility options is only one of three megatrends that will simultaneously sweep through the global fleet market, triggering change to our traditional business model. The three megatrends that will disrupt and reshape fleet management in the next decade are:

Expansion of the traditional fleet model into a broader multi-modal mobility management for employees.

The merger of in-house fleet management and corporate travel services into a single corporate entity.

The integration of fleet/mobility management into the emerging connected vehicle ecosystem.

One potential to the convergence of these three megatrends is that fleet operations may evolve to become only one facet of a larger corporate mobility management function that has multi-level responsibilities for asset lifecycle management, administration of multi-modal mobility services, and deployment of productivity and safety tools to support the mobile workforce in the field.

Paradigm Shift to Multi-Modal Mobility

Mobility management is not a threat to the fleet profession, but it will alter it, most likely for the better. Ultimately, today’s consumer mobility options will be blended into a menu of hybrid fleet services offered as employee mobility choices by corporations. These services will be new tools in the fleet manager’s toolbox.

One way mobility management will alter fleet management is that it expands the services offered beyond the finite number of employees who qualify for a company-provided vehicle, which represents only 10-20% of the employee population. Management of mobility services will allow fleet services companies to serve the other 80-90% of the workforce who do not qualify for company vehicles, but have their own mobility needs.

However, in order for mobility management to succeed, there must be viable alternatives to company-provided vehicles, such as a well-connected public transportation network seamlessly interconnected with “last mile” mobility solutions. The fleet management profession of the future will be far more complex by having to manage a number of different mobility suppliers covering the different categories of travel versus today’s traditional focus on managing the vehicle asset and driver.

An important caveat is that mobility services are not applicable to all fleet segments. For example, the majority of companies are truck-based vocational fleets geared to specialized mission requirements that necessitates operating expensive job-specific equipment, which doesn’t lend itself to a mobility offering. While sales fleets are the better candidates to adopt mobility solutions, some sales reps require secure storage that is offered by a locked vehicle trunk. For instance, pharma reps need secure storage when transporting drug samples. Similarly, merchandise salespeople often carry expensive or bulky point-of-sales displays that favor an employee-assigned vehicles versus a mobility program.

Convergence of Fleet & Corporate Travel

For decades, management has recognized the similarities between fleet and travel management. For instance, a growing number of managers have dual responsibility of managing both fleet and travel, since they are viewed as complementary functions.

The boundaries between fleet and travel management will further converge as the travel functionality and fleet functionality become simply different manifestations of the same mobility options. This will provide the business case to realign fleet and travel management into a single corporate function to control spend, improve operational efficiency, reduce CO2 emissions, and increase employee satisfaction. These potential cost savings will incentivize corporations to invest in new integrated IT functionality to realign their fleet and travel processes into a single mobility platform.

Supporting Field Workforce Productivity

Connectivity allows vehicles to wirelessly transmit and receive data between themselves, the surrounding infrastructure, and other proprietary systems, which is generically called the connected vehicle ecosystem. This connected vehicle system will be based on an open platform to allow third-party companies to develop new products and applications that will work in this space.

What will emerge is a connected commercial vehicle ecosystem, which will encompass not only the vehicle, but also the mobile workers and the opportunity to digitize many of the off-line analog work functions that exist in today’s mobile work environment.

Increasingly, corporations are looking for solutions that will increase field workplace productivity and efficiency to drive a much stronger growth curve in their businesses. As a result, fleet service companies have the opportunity to expand beyond the vehicle to support the mobile worker and their work application.

Global Mobility Management Deep Dive

The latest trends in mobility management will be featured at the 2018 Global Fleet Conference in Rome, Italy, which will be held May 29-30, 2018. The session will examine the latest mobility initiatives occurring at the local level, driven by smart cities and local government initiatives.

A panel discussion of subject-matter experts will examine mobility management across the globe. There will also be a case study by Alexandra Melville, global category expert for car fleet and mobility, Accenture, along with a follow-up executive fleet and mobility panel that will answer global mobility needs of tomorrow.

Market Trends

Many times employees who have an “entitlement mentality” do not have a sense of responsibility to take care of the company asset as if it was their own. This impacts fleet costs. A company vehicle in poor condition because of driver abuse or neglect will result in lost resale value or incur unnecessary reconditioning expense at auction.

Not only is last-mile delivery the fastest growing vocational fleet segment, it is also demonstrating that it will be an early adopter exploiting the technologies and business practices that will become the new core fleet management tools to be employed in the next decade of the 2020s.

While technology is making vehicles safer, last longer, and be more environmentally friendly, it is also making them increasingly complex. As vehicles become more complex, so do all aspects of vehicle repairs.

One challenge for fleet managers interacting with procurement professionals is understanding the nuances of procurement terminology. Many fleet managers believe the term “procurement” is synonymous with the term “sourcing,” but there are important distinctions between the two functions.

When hiring prospective drivers it is important to beware of expunged motor vehicle records (MVRs). Many states have a process where drivers can remove part of their driving record from view, hiding violations from potential employers.

Negligent entrustment lawsuits typically focus on whether the company has an established safety policy and whether it enforces those policies. It is important to remember the standard for negligent entrustment is not whether the employer knows it has put people at risk; it is whether the employer should have known.

The recent U.S tax law changes created a problem for employers who use a non-accountable vehicle reimbursement plan. Negative feedback has some companies reconsidering the viability of offering company-provided vehicles to help key employees mitigate the adverse impact of eliminated tax deduction.

A truck’s total cost of ownership (TCO) covers a specific range of expense variables, regardless of the make or model. The four lifecycle categories that influence TCO are fixed costs, operating expenses, incidental costs, and depreciation/resale value. A key factor that drives these lifecycle categories is a vehicle’s service life.

Most in procurement take the position that fleet’s primary responsibility is to buy assets and services, which annually can range from millions to tens of millions of dollars in expenditures. This amount of corporate spend requires it be managed by someone with superb negotiation skills and proven procurement acumen.

If you want to provide added value to your company, you need to view fleet as a business and not simply an aggregation of assets to be managed cost-effectively. The fastest way to improve your bottom line is to increase fleet utilization, which increases the productivity of each individual truck.

Blog: Vocational trucks are susceptible to being targeted for staged accidents, which involves maneuvering an unsuspecting employee driver into an intentional crash in order to make a false insurance claim or to file a lawsuit against the driver’s employer.